You probably guide every new customer through a sales cycle for your product. This process includes well-defined stages, with the goal of transforming prospects into leads, leads into opportunities, and opportunities into customers.
While having a structured process is a strong foundation, many companies, experience customers who diverge from this path. They don’t adhere to the steps necessary to become a sales qualified lead. Instead, they act based on their unique challenges, decisions, and budget constraints. They follow their own distinct buying process, which complements your sales team’s efforts, much like peanut butter complements jelly.
Understanding your customers’ buying behavior and aligning your marketing, pricing, and sales processes with their preferences can lead to higher conversions, improved retention, and reduced sales costs. Failing to synchronize these processes is a common pitfall for many companies.
Let’s explore how you can optimize your sales process to match your customers’ buying cycle, beginning with a clear definition of the buying cycle.
What is a buying cycle?
The buying cycle, also known as a purchase cycle, represents the journey a customer undertakes when purchasing a product or service. Customers progress through various stages in this cycle as they become aware of their problem, seek solutions, and approach a final purchasing decision. After making that decision, the question of repeat purchases arises.
The five buying-cycle stages
Although the specific buying cycle may vary depending on the product or service, every customer experiences some version of it, involving:
- Realizing they have a problem.
- Considering their options.
- Making a decision.
- Purchasing a solution (or renewing, in the case of subscription products).
Each stage demands distinct strategies to encourage customers to advance to the next phase. Customers expect different interactions from you depending on their current stage. The objective at each stage isn’t necessarily to secure a sale; instead, it’s to guide each customer to the subsequent stage.
It’s essential to acknowledge that customers control their position within the cycle. Our role is to align our strategies and sales processes with their position in the purchasing cycle.
Now, let’s delve deeper into each stage of this cycle.
1. Awarenes
- The buying process kicks off with the Awareness stage. At this point, potential customers recognize they have a problem that demands a solution. They embark on a quest to find answers. This stage also stands out as the one where companies channel the most effort into their marketing, as the potential to reach new customers is virtually limitless, depending on market size.
- Once potential customers become aware of your product or service and how it can address their issue, they naturally progress to the next leg of their journey: Consideration.
2. Consideration
- The Consideration stage marks a crucial juncture where your role as a salesperson comes into play. Your customers are actively exploring various solutions, and your product, ideally, is among their options. Your task in this phase is to furnish them with comprehensive information, demonstrating how your product or service outshines the competition in resolving their issue and the benefits they’ll reap post-resolution.
- Once customers are sufficiently convinced of their need to procure a solution for their problems, whether that means opting for your product or a competitor’s, they move forward to the next stage: Intent.
3. Intent
- In this stage, decision-makers assess the various alternatives available, weighing them based on logical, emotional, or financial considerations. The solution that emerges as the most compelling in these respects becomes their choice. Your sales team’s mission at this juncture is to persuade customers that, among the potential solutions on the table, yours is the standout product or service.
- Eventually, each customer reaches the point of readiness to finalize the purchase, advancing to the fourth stage: Purchase.
4. Purchase
- At the Purchase stage, the customer has made their decision and proceeds to buy the chosen product. (Ideally, it’s yours, but if not, it’s a cue to refine your approach!)
- Even at this advanced stage, your responsibilities remain. Establishing an ongoing relationship with customers and offering support throughout their problem-solving journey is crucial. Maintaining close contact can also open doors to persuade customers to make repeat purchases or renew their subscriptions—setting the stage for the next phase.
5. Repurchase/Continuous Purchase
- This stage varies depending on your product’s nature.
- If your product is perishable, like food, or consumable, like diapers, your customers are likely to return soon for a reorder. Similarly, if your business operates on a subscription model, customers repurchase when their billing cycle renews.
- The beauty of this stage is its potential for indefinite repetition, making it a prime arena for revenue growth.
Why Buying Cycles Matter
- Even the most successful businesses only convert a small fraction of potential customers, as many remain at various stages of the buying cycle.
- Without a deep understanding of your target customers’ mindset during the purchase process, your sales and marketing efforts can become futile, and you might miss out on capturing those potential customers.
- Conversely, seeing your products from your customers’ perspective and grasping what drives them through each buying cycle stage paves the way for a thriving business.
Here’s Why Purchase Cycles Should Matter for Your Company
Optimize Your Marketing Efforts
- Examine your marketing initiatives through the lens of your customers to pinpoint what’s working well and where your efforts will yield the most significant results.
- You might discover that while you’re attracting a considerable amount of qualified traffic, these leads aren’t converting, indicating issues in the consideration or intent stage. Alternatively, you might find that your conversion rates are high, but you need to generate more leads, requiring increased efforts in building awareness.
- Identifying these areas of impact is essential for refining your marketing strategy.
Convert More Customers
- Customers in the early stages of problem recognition don’t appreciate aggressive sales tactics, nor do they require elementary education about a solution when they’re ready to purchase.
- Understanding customers’ needs at each stage and aligning your sales approach accordingly significantly enhances your conversion rate, all while avoiding the irritation of customers not yet prepared to buy.
Capture a Larger Market Share
- Beyond boosting conversions with new customers, optimizing your purchase cycle can foster loyalty among existing customers, ensuring they continue to choose your product or service over competitors’.
- Investing in retention analysis delivers substantial returns; increasing retention by just 5% can result in profit growth ranging from 25% to 95%. While concentrating more on the later stages of the buying cycle may lead to delayed results, the benefits of increased renewals and customer lifetime value are well worth the effort and patience.
Enough about Benefits—Let’s Talk Tactics.
Optimizing Every Stage of the Buying Cycle
If you solely focus your efforts on one end of the customer purchasing cycle, such as closing sales or educating customers about their problems, you risk missing out on potential customers who are still at the opposite end of the cycle.
You can’t take shortcuts in the buying process. Instead, it’s crucial to optimize your sales and marketing strategies for each stage of the purchasing cycle. Let’s explore what you should be doing at each stage to guide customers along their buyer journey.
Awareness: Marketing Initiatives
- Your marketing team should be at the forefront of this stage from the very beginning.
- It’s paramount that your customers are aware of your product’s existence and understand that it can effectively address their specific challenges.
- Establishing awareness about your product requires a deep comprehension of the particular difficulties potential customers face and how your product or service alleviates those issues.
- Start by crafting targeted content that assists them in addressing these problems. Then, disseminate your content where your future customers are already spending their time, such as on social media.
- Once potential customers engage with your content and, ideally, sign up for your newsletter, leverage marketing automation tools to nurture them until they’re ready to progress to the consideration stage.
Consideration: Offer Tiers and Options
- Customers in the consideration stage are actively seeking the best solutions to meet their needs, and chances are, you’re not the sole option available to them.
- Prioritize content once again; articles, case studies, and videos can educate customers about your solution and emphasize why choosing your product over competitors’ is advantageous.
- However, there’s an additional strategy that your competitors might overlook: providing multiple pricing tiers and product options.
- Customize each tier to cater to specific customer personas or budget levels. This ensures that every customer can find a tier that aligns closely with their requirements.
- Moreover, it sets your product apart from competitors who offer only a single option.
Decision: Closing the Deal
- At this stage, your potential customer comprehends their needs, understands how your product resolves their problem, and is prepared to make a purchase decision.
- Let’s explore some tactics to facilitate the closing of the deal.
Intent: Product Descriptions, Reviews, and Branding
Customers at the intent stage have made the decision to purchase a solution. Your mission at this point is to convince them to choose your solution.
Success here hinges more on gaining the trust of potential customers rather than simply educating them. Allow your product to speak for itself—customer reviews, case studies, and benefits lists are influential in swaying customers to entrust you with their credit card information. Ensure you emphasize what your product excels at compared to the competition, why your existing customers are enthusiastic about it, and why your brand signifies quality.
Purchase: Optimize Pricing
Your customer is ready to commit to your solution, and the last thing you want is for them to have second thoughts at the eleventh hour.
Ensure that your pricing is transparent and aligned with their expectations. Discovering late in the game that your pricing is either higher or significantly lower than what they anticipated can be the final obstacle to sealing the deal.
For many companies, the most viable approach is to establish pricing based on value. By determining how much customers are willing to pay for your product before they reach the purchasing decision, you not only enhance your conversion rate but also boost profitability. Always opt for value-based pricing to maximize your revenue.
However, the show doesn’t end with the purchasing decision. You can further enhance retention and repurchase rates with a few additional strategies.
Repurchase and Renewal: Prioritize Customer Care
Whether you’re selling subscriptions or one-time purchases, growing your lifetime revenue relies more on retaining existing customers and increasing repurchase rates than on the number of customers who click the “buy” button.
Unchecked customer churn can devastate your business. Therefore, shift your focus away from marketing in the final stage in favor of customer care and product advocacy. Ensure your customers are not only happy but also remain satisfied by maintaining regular communication. As your content customers become more acquainted with your product, seek testimonials, case studies, or referrals from them to attract other potential customers.
You Can’t Skip the Process
Many companies invest a considerable amount of energy attempting to seal the deal, but they frequently target individuals who haven’t reached the point of readiness to make a purchase.
Attempting to expedite the buying cycle will invariably lead to frustration and revenue loss. Rather than that, comprehending how customers go about purchasing your products and how to enhance the purchasing cycle will enable you to convert more customers with reduced effort.
Isn’t that what we all aspire to achieve?
For more information regarding getting leads and converting them, contact the team at Floodmaker today!
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